Tackling housing not beyond us: ACOSS

As Scott Morrison pens his final speech before budget day, welfare groups have expressed their concerns the federal government appears to be retreating from seriously tackling Australia's housing affordability problem.

The treasurer will address an Australian Business Economists lunch in Sydney on Thursday, his final set-piece event before handing down his second budget on May 9.

Prime Minister Malcolm Turnbull appeared to tone down expectations for a budget solution to housing, an issue the Australian Council of Social Service and National Shelter say the government should be grasping "with both hands".

ACOSS head Cassandra Goldie said it suggests some within the coalition view the task as beyond them.

"It is not," Dr Goldie said on Wednesday.

"Australia's housing affordability crisis is serious and we need a serious plan to tackle it. We have become a nation of housing haves and have-nots."

Shadow treasurer Chris Bowen told a Sydney conference everyone knows there is an internal war about what would be in the government's package.

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"Now it appears they can't even agree on whether there will be a package in their budget," he told the McKell Institute's housing affordability summit.

He said affordability is not only about fairness and equity, but also one of financial stability.

"A property based economic shock would impact on those who can least afford it," he said.

National Shelter chief Adrian Pisarski estimates half a million more affordable homes are needed.

"A growing number of people on social security payments or modest wages are being pushed out of our cities - where most of the jobs are - by a creeping crisis in housing affordability," he says.

In its to-do list, ACOSS and National Shelter call for reinvestment in social housing through the National Affordable Housing Agreement with states and backs the government's plan for a "bond aggregator" to encourage private investment in the sector.

They also want the Newstart allowance and rent assistance increased, and secure homeless funding for at least the next five years.

But topping the list are changes to capital gains tax and negative gearing to slow the growth in house prices and rents, and tax concessions changes, which the government is against.

The latest Newspoll published in The Australian found voters backed a reduction in tax breaks for housing investors - including 52 per cent of coalition supporters - compared with 28 per cent against.

However, the Property Council of Australia warned against "playing with" negative gearing.

"Negative gearing and the capital gains tax discount are essential components of the private rental market, as well as rational tax policy," it says.

It says costly regulations, poor planning decisions and excessive taxes across all levels of government had created a housing logjam.

It wants the government to consider low-deposit loans for first home buyers based on their rental and work histories, as well as a rethink on downsizing rules that discourage pensioners from moving.

The treasurer's office declined to comment on an Australian Financial Review report the government is considering offering exemptions from new limits placed on superannuation to encourage retirees to downsize by selling the family home.